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Digital Transformation in the Retail space: Key Drivers (1/3)
Digital Transformation in the Retail space: Key Drivers (1/3)

September 29, 2022

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This is the first blog of a three-part series on Digital Transformation in the Retail space. The next two blogs will elucidate some of the key action-points that retailers need to adopt given the transforming landscape of the sector, the key technologies disrupting the retail space, technology priorities in the next 3-5 years, as well as key trends pertaining to technology investments, digital spend focus areas, digital workforce, talent sourcing strategy and enterprise readiness to adopt a hybrid work mode as elucidated in NASSCOM-Avasant's report titled “DIGITAL ENTERPRISE MATURITY 3.0: Boosting Business Resilience through Technology” published in July’2022.

Among the many changes that the Covid-19 pandemic has induced, digital transformation disrupting the retail industry is certainly one that is noteworthy.  As consumers shift their buying patterns from offline to online modes and are more informed, less loyal, and increasingly channel agnostic, they demand differentiated, customized and rapidly evolving experiences and expect greater product connect. Moreover, the evolution of retailing to electronic retailing (e-tailing) and e-commerce to quick commerce (q-commerce) is prompting retailers to adopt digital technologies at warp speed and come up with innovative business models to cater to the fast-changing customer demands and customer experience (CX) expectations.  Digital transformation in the Retail arena, is broadly driven by 4 factors:

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  1. Engaging customers: Consumer demands, purchasing patterns, personas, spending habits and styles, and preferred modes of purchase have transformed at a deeper level and digital purchases are here to stay as part of the ‘new normal.’ The consumer of today wants a ‘personified’ experience at the touch of a button, at their doorstep and at lightning-fast speed. Technologies such as mobile computing and data analytics help businesses predict and understand consumer behaviour better and elevate customer relationship to the next level with advanced customer relationship management (CRM) systems. Moreover, adopting a journey-driven approach considering end-to-end consumer insights by comparing customer lifetime value with acquisition costs, can help in optimum allocation of resources to unlock maximum value, right through the omnichannel experience.
  2. Empowering employees: Upskilling/reskilling employees or hiring specialists is critical to ensure that the employees are armed with the required knowledge, skills, and tools to ensure optimum application of technology for desired results.
  3. Optimize Operations: Technology enables swift, data-driven decision-making, streamlined workflows, and increased operational visibility across channels. Convergence of technology is vital in today’s day and age of e-commerce/q-commerce, as organizations leverage multiple distribution channels to compete in the playing field. To ensure a smooth omni-channel experience for the end-user, operational consistency is paramount. By inculcating advanced ERP systems organizations can get a point-to-point view of cross-channel operations, including inventory, consumer transactions, customer service, so on and so forth. Also, organizations need to restructure their operations, supply chains, inventory management, and customer relationship practices to attain maximum operational efficiency.
  4. Reconceptualizing products: Reengineering products to meet changing customer demands is pivotal. With the help of Artificial Intelligence (AI), Machine Learning (ML) and Predictive Analytics (PA) enterprises can predict and understand changing buyer behaviour, as well as identify possible failures which helps them take preventive/corrective action and maximize return on investments (ROI). Further, enterprises can leverage digital intelligence to discover new sources of revenue and growth.

Digitalization helps retailers not only amplify in-store and online experiences but also offer seamless, personalized customer service with the help of technologies, such as Big Data Analytics (BDA), location-based services, eCommerce, mobile apps, etc. Moreover, digital supply chains enable suppliers and carriers to stay connected real-time, enhance inventory visibility, and support integrated demand estimations, building in for operational efficiencies. Thus, digital transformation helps organizations become agile by building in flexibility and visibility at various touchpoints.

For more information on Digital Transformation across sectors (including Retail) and Digital Enterprise Maturity, please refer to the report downloadable at the following links:

NASSCOM Website: https://nasscom.in/knowledge-center/publications/digital-enterprise-maturity-30-boosting-business-resilience-through

NASSCOM Community: https://community.nasscom.in/communities/digital-transformation/digital-enterprise-maturity-30-boosting-business-resilience

Earlier versions of the report can be downloaded from the following links:

A NEW ORDER OUT OF CHAOS-BUILDING A FUTURE READY ORGANISATION-https://community.nasscom.in/communities/digital-transformation/new-order-out-chaos-building-future-ready-organisation

REIMAGINING INDIAN ENTERPRISES' TECH LANDSCAPE IN A DIGITAL-FIRST WORLD – A NEW ORDER OUT OF CHAOS- https://community.nasscom.in/communities/digital-transformation/reimagining-indian-enterprises-tech-landscape-digital-first

DEFINING THE DIGITAL ENTERPRISE - MAR 2020 -https://community.nasscom.in/communities/digital-transformation/defining-the-digital-enterprise-mar-2020.html

Sources:

  1. The tech transformation imperative in retail
  2. Digital Transformation in Retail: Why It’s Important & How to Achieve It
  3. Digital Transformation in the Retail Industry: Trends, Challenges, and Examples

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Prerna Buckshee
Manager - Research

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